Icahn Partners | Carl Icahn | Hedge Fund Notes

Icahn Partners

Icahn Partnes | Hedge Fund Notes

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Resource #1: Make no bones about it: Icahn Partners (that's the fund's name) should be quite the green machine, if you know what I mean. The fund, which requires a $25 million minimum investment, is in the middle of raising a stunning $3 billion--of which Icahn is said to be putting up $300 million. Here's how he would make out: Carl & Co. will take a 2.5% annual fee and 25% of the net annual profits (compared with the 1% and 20% that are typical for hedge funds).

Say Carl raises $2.7 billion from investors. That means they'll be paying $67.5 million in annual fees (2.5% of $2.7 billion). Then let's assume that Icahn returns 15% a year (which might be conservative since the proposal shows that Icahn has generated annual returns between 48% and 53% since 1990). A 15% return on $2.7 billion is a profit of $405 million. Take 25% of that and you get just over $100 million. So the new fund could generate $167 million for Icahn--in a subpar year.
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Tags: Icahn Partners, Icahn Capital Management, Icahn Capital LP, Icahn Capital, Icahn Capital hedge fund, Icahn partners hedge fund, Carl Icahn, hedge funds, hedge fund